Alkan v. New Hampshire Ins. Co.

• Decision Date: 18 October 1881
• Citation: 53 Wis. 136,10 N.W. 91
• Court: Wisconsin Supreme Court
• Parties: ALKAN v. THE NEW HAMPSHIRE INS. CO.

53 Wis. 136

10 N.W. 91

ALKAN

v.THE NEW HAMPSHIRE INS. CO.

Supreme Court of Wisconsin.

Filed October 18, 1881.

Appeal from county court, Milwaukee county.

Action on a policy of insurance issued by the defendant company to one Isadore Alkan, insuring him against loss by fire or damage thereby to his distillery building, office, and warehouse, and certain specified machinery therein, from June 26, 1879, (the date of the policy,) to September 26, 1879, to the amount in the aggregate of $1,500. The policy contains stipulations to the effect that the same shall be void “by reason of any false representation of, or omission on the part of the assured to make known, any material fact respecting the condition, situation, value, or occupancy of the property hereby insured; * * * or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, lessee, or otherwise be not truly stated in this policy.” The policy contains stipulations that it shall become void (1) if the insured premises shall become vacant or unoccupied; (2) if the policy shall be assigned “either before or after loss;” and (3) if “any change takes place in the title or possession, whether by judicial decree, legal process, or voluntary conveyance.” It also contains the following clauses: “Carpenter's risk granted during the term of this policy; and it is understood and agreed, and this policy of insurance is issued upon the express condition, that the property insured shall not be operated as a distillery during the term of this insurance, it being intended by this policy to cover carpenter's risk only.”“The said company agrees to make good to the assured, or his executors, administrators, or assigns all immediate loss and damage by fire to the property above specified, not exceeding the sum insured, nor the interest of the insured, to be estimated at its actual cash value, for the term of three months, commencing the risk the twenty-sixth day of June, 1879, at noon, and to continue until the twenty-sixth day of September, 1879, noon, upon the following terms and conditions.”

It is unnecessary to state further the contents of the policy, as the portions above stated present all of the questions argued on the hearing of this appeal, or considered by the court. The jury returned a special verdict, in which it was found that the policy was issued as above stated; that the insured property was destroyed by fire September 16, 1879; that due proofs of loss were presented to the company by the insured as required by the policy; that afterwards, on the thirteenth of February, 1880, Isadore Alkan assigned to the plaintiff all his right, title, and interest in the policy, “and all benefits and advantage to be derived therefrom,” and no notice of the assignment was given to the company at or before the time it was made; that repairs were made in the distillery under the “carpenter's risk”--the work having been commenced the last of July, and ended September 10, 1880; and that the premises remained unoccupied about 30 days before the work was commenced, and about six days after it was completed, no notice of which was given to the defendant or its agents. It appeared by the proofs that when the policy was issued the assured owned the insured premises and property, and had then agreed to lease the same to Hoffmam, Zimmerling & Rindskopf, and the jury found that the assured gave H., Z. & R. permission to do carpenter work and make repairs; that they took possession of the premises for the purpose of making repairs only; that the assured did not employ the men to do the work, or pay, or agree to pay, them; that the repairs were made under the direction of H. and Z. by permission of the assured; and that defendant or the agents were not notified that such permission had been given.

The jury also found that when the policy was issued the property was encumbered by an internal revenue tax amounting to nearly $50,000, assessed thereon by the government of the United States, of which the company had no notice, and that an action to enforce the assessment was then pending on appeal in the supreme court of the United States. The jury further found generally for the plaintiff, and assessed his damages at the sum named in the policy and interest. Both parties moved for judgment on the special verdict. The motion of the plaintiff prevailed, and judgment in his favor for the damages assessed by the jury and costs was duly entered. From that judgment the defendant has appealed.Cottrill, Carey & Hanson, for respondent.

Murphy & Goodwin, for appellant.

LYON, J.

It is claimed on several grounds that the defendant company is not liable on the policy in suit, and hence that the judgment ought to be reversed. These grounds, as stated and argued by the learned counsel for the defendant, are briefly the following: The policy was void in its inception, because the assured failed to disclose to the insurer (1) that the property was encumbered by the government taxes assessed upon it; (2) that he had contracted to lease the property to Hoffman and his associates; and (3) that the property was unoccupied.

If it shall be held that the policy was valid in its inception, then it is claimed that it afterwards became void because (1) it covers nothing but a “carpenter's risk,” and that risk had ceased before the insured property was burned; (2) it was assigned by the assured to the plaintiff, after loss, without the consent or knowledge of the defendant company; and (3) there was a change of possession of the property after the policy was issued. These several propositions, alleged as grounds for reversal, will be considered in their order.

1. Was the policy void in its inception? No application accompanies the policy, and it contains no clause expressly requiring the assured to disclose encumbrances upon the property insured. Undoubtedly the existence of encumbrances is a fact material to the risk. There is a stipulation in the policy that the omission “to make known a material fact respecting the condition, situation, value, or occupancy of the property” shall in validate the policy. This stipulation relates more particularly to the physical status of the property, and falls far short of requiring the assured to disclose encumbrances unasked. The assured represented that he was the owner of the property, and on the trial proved the representation true. There is no pretence that he fraudulently suppressed any fact relating to his title. If the defendant company desired more particular and definite information on the subject it should have called upon the assured for such information. Failing to do so, and there having been no fraudulent concealment by the assured, we find nothing in the policy which destroys the contract merely because the assured did not volunteer the statement that a lien for taxes existed upon the property. The principle which must control here is thus stated in Wood on Insurance, 388: “When no inquiries are made the intention of the assured becomes material, and to avoid the policy it must be found, not only that the matter was material, but also that it was intentionally fraudulently concealed.” This, doubtless, is a correct statement of the law in cases like this. The above observations apply with equal, perhaps greater, force to the fact that the assured failed also to disclose that he had entered into a verbal executory contract to lease the property to Hoffman and his associates. No discussion of this point is required.

2. The policy contains a printed stipulation or condition that it shall be void if the premises shall become vacant or unoccupied. The premises were unoccupied when the policy issued, and during much of the term for which they were insured, and also at the time they were burned. But, under the circumstances of the case, we do not think the policy was thereby rendered void. The insured property consisted of distillery buildings and machinery. Presumably, the property was available for no other use; yet the policy prohibits that use of the property, and but for the carpenter's risk, which the defendant granted, would have compelled the assured to let his property stand idle or forfeit his insurance. In other words, it would have compelled him to leave the property practically unoccupied during the life of the policy. With such a provision in the policy it seems to us that the company cannot be heard to allege a forfeiture of the contract because the premises were unoccupied. There is another aspect of the case which leads to the same conclusion. The assured, by his agent, applied to one Weil, an insurance agent, to insure the distillery property. Weil did not place the risk with any company which he represented, but placed it in companies represented by other agents--the defendant company being one of them. There was no communication on the subject between the plaintiff and the regular agents of the latter company; at least, none is proved. His negotiations were exclusively with Weil. These facts are undisputed, and they make Weil the agent of the defendant company, in respect to this insurance, by virtue of Rev. St. 584, § 1977; for most assuredly he aided and assisted in transmitting an application...